Eukaryotes from yeast to humans secrete bioactive peptides and proteins that are excised by proteolysis from precursors late in the secretory pathway. The yeast Kex2 protease, a membrane-bound serine enzyme distantly related to subtilisin, was the first enzyme proven to carry out such processing reactions in vivo. Our identification of human furin as a Kex2 homologue gave definitive evidence for conservation of the processing machinery throughout eukaryotic evolution. Discovery of additional Kex2 homologues in vertebrates and invertebrates suggests that members of the Kex2 family act on diverse substrates, including precursors of peptide hormones, neuropeptides, growth factors, cell surface receptors, plasma proteins, coagulation factors, and viral envelope glycoproteins. Thus, elaborating the nature and structural basis of the specificity of Kex2 protease and its homologues, in addition to providing basic information about a critical pathway of post-- translational processing, should prove of great value in the design of inhibitors having a wide range of pharmacological functions. In this application, we propose to advance our studies of Kex2 protease and to extend our analysis to human furin. The aims of this work are threefold: 1. To elucidate the fundamental basis of specificity in prohormone processing, we propose detailed studies of substrate recognition by Kex2 protease. The contributions of substrate sequence and higher order structure to specificity will be determined by analyzing the reaction of purified Kex2 protease with model peptide substrates and purified natural precursors. A novel genetic selection for mutations in Kex2 protease that alter its specificity will be used to map residues in the enzyme that are critical for cleavage site discrimination. 2. To obtain a broader understanding Kex2-related processing enzymes, we propose parallel studies of the specificity of human furin, the ubiquitous tissue distribution of which suggests involvement in numerous physiologically important processing reactions. Furin, for which we have devised an efficient expression system, will be purified to homogeneity. The specificity of the purified enzyme will be evaluated through cleavage of model peptide substrates and a likely physiological substrate, the insulin receptor precursor. 3. The goal of structure-function studies of Kex2 protease is to define features that distinguish the Kex2 family of specific processing enzymes from the degradative subtilases to which they are evolutionarily related. We propose to elucidate the pathway of intramolecular cleavage of the N-terminal pro-domain. Further, we plan to elucidate the function of a novel C-terminal domain that is unique to members of the Kex2 family and which we have found is essential for formation of active Kex2 protease.